Ten central trade unions have told the government that the newly announced Employment-Linked Incentive (ELI) schemes for companies would serve corporate interests and promote a hire-and-fire culture instead of benefiting the workforce or helping create jobs.

Congress labour arm Intuc, the CPI’s Aituc, the CPM-backed Citu and seven other workers’ bodies wrote to Union labour minister Mansukh L. Mandaviya last week expressing their fears.

Finance minister Nirmala Sitharaman had in her budget speech announced three ELI schemes and an internship programme involving top companies, saying these would boost job creation. A labour ministry official said the details of the schemes were being worked out.

“By channelling public funds to these corporations under the pretence of economic incentivisation, the schemes primarily serve corporate interests rather than delivering real benefits to the workforce or addressing the fundamental issues of job creation,” the letter said.

Under the first scheme, for any first-time worker a company hires in any sector, the government will provide the first month’s wages — up to a maximum of ₹15,000 — provided the new employee’s monthly salary is less than ₹1 lakh. The subsidy is meant to encourage employers to hire first-timers.

The trade unions have asked whether such a limited subsidy would meaningfully contribute to long-term employment growth or merely provide short-term relief to employers.

The second scheme offers a four-year incentive to employers who hire more than 50 youths or 25 per cent of their baseline workers’ strength, whichever is lower. The incentive is 24 per cent of the salary for the first two years, followed by 16 per cent in the third year and 8 per cent in the fourth.

The unions said this scheme would primarily benefit employers at public expense.

The third scheme is about incentives to employers who add to their baseline workforce — by two if they have less than 50 employees and by five if they have more than 50.

For two years, the government will reimburse the employer’s contribution to the EPFO — by up to ₹3,000 a month — for the additional employees hired the previous year.

The unions said this scheme would disproportionately benefit private employers without ensuring meaningful, long-term employment.

The unions said all the ELI schemes required companies to recruit new employees each year if they wanted to continue claiming the benefits.

“This will inevitably lead to the retrenchment of workers after just one or two years, effectively treating them as fixed-term employees,” the letter said.

“Such a practice will worsen the cycle of mass hiring and firing of the emerging workforce, reinforcing a temporary or fixed-term employment model rather than promoting long-term job security.”

Under the internship scheme, the government will provide internship opportunities to 1 crore youths for 12 months each with 500 top companies over a period of five years. The interns will receive a monthly allowance of ₹5,000.

The unions said this risked allowing large corporations to exploit cheap labour in the garb of internship without ensuring fair treatment, job security, or long-term employment opportunities for these interns. They urged the government to reconsider the implications of this policy.